Diesel prices have risen by 34% over the past two days, reaching a record high as tensions in the Middle East escalate and worsen supply shortages.

Global diesel prices have surged to multi-year highs as the war against Iran spreads in the Middle East, putting additional pressure on already tight supply markets. In Europe, benchmark diesel futures saw a record two-day increase of 34%. U.S. diesel futures rose 16% on Tuesday to $3.37 per gallon, the highest level since September 2023. The average retail price of diesel has reached its highest level since May 2024. Diesel prices have reacted strongly to the Middle East conflict, in part because the Strait of Hormuz is a key passage for large exports of diesel produced by refineries in the region. Shipping restrictions have further tightened global markets, and after an unusually cold winter on the U.S. East Coast, inventories are low. Transport costs have also risen significantly, with shipping prices for oil products from the Gulf to Northwest Europe reaching their highest level since 2024 on Monday. The soaring diesel prices will increase transport costs, which are a key component of inflation. With gasoline prices also rising, the rising fuel costs pose a risk to U.S. President Donald Trump and the Republican Party as they approach the midterm elections later this year. European benchmark diesel futures closed at $1,009 per ton on Tuesday, with a two-day increase of 34%, reaching the absolute highest price since 2023.